LONDON (ShareCast) - London’s top stocks closed sharply lower as weak banks and housebuilders offset a number of strong oil stocks.

Royal Bank of Scotland's drifted lower after it said write-downs on credit market exposures are expected to remain within the estimates already indicated. Overall, the group's underlying results, excluding write-downs on credit market exposures, are expected to remain satisfactory. The bank said integration of ABN Amro is on schedule with cost savings slightly ahead of expectations.

Meanwhile Alliance & Leicester was weaker ahead of its expected relegation from the FTSE 100.

In the same sector, HBOS said current trading and specifically the mortgage arrears performance is in line with expectations. "HBOS confirms that its fully underwritten rights issue is proceeding according to plan,” it added. The bank’s shares still closed sharply lower.

Crude oil for July delivery has risen to over $134 in New York, boosting demand for the likes of BP, BG Group and Shell.

Curiously, the strength of the oil price has not stopped fuel consumers British Airways and FirstGroup from making progress.

Housebuilders continued to fall like a stone. Persimmon was down again after Goldman Sachs and Merrill Lynch downgraded the stock from “neutral” to “sell”. The stock is certain to be ejected from the list of FTSE 100 constituents, leaving the benchmark index bereft of housebuilders.

Persimmon was by no means alone among housebuilders on the slide, with wince inducing losses seen on the likes of Taylor Wimpey, Bellway, Redrow and Bovis.

However, shares in Barratt Developments moved off earlier lows after the housebuilder confirmed its full-year guidance. The group said it remains comfortable with market consensus forecasts for profit before tax and exceptional charges of £395m and completions numbers of 18,300.

Plumber’s merchant Wolseley joined the housebuilding sector on the slide.

Cable & Wireless and Johnson Matthey were both sluggish as they trade in ex-dividend form.

Kazakh miner ENRC said the good trends seen in the first quarter have continued in the current three months. "Into the second quarter of 2008 the trends underlying trading this year have continued. Significant price increases will feed through to benefit ferroalloys and iron ore revenues," chairman David Cooksey said ahead of its AGM.

Shares in Antofagasta moved lower after the Chile-based miner cautioned that maintaining margins will be a 'major challenge'. The group said the international business climate is becoming increasingly complex, making it more difficult to maintain its profit margins.

Among the FTSE 250 stocks, Ferrexpo and Invensys were wanted ahead of expected promotion to the FTSE 100. Home Retail, one of the stocks likely to make way for them, was sharply lower in a retail sector which also saw fellow DIY company Kingfisher under the cosh. Clothes outfits Next and Marks & Spencer suffered from downbeat commentary on the UK retail sector by Citigroup. The banking group rates UK retail stocks as a “sell” on the basis that discretionary spending power will decline this year and next.

Citigroup did, however, have some good words to say about spread betting firm IG Group, which it now rates as a “buy” on expectations of improved earnings in 2008 and 2009.

Oil and gas facilities service provider Petrofac, another stock pushing for promotion to the FTSE 100, has won the duty holder contract for the Northern Producer floating production facility worth around £15m a year.

Fund Manager Rensburg Sheppards funds under management fell to £12.95bn at the end of March from £14.4bn, a year ago, though underlying profits rose by 15.6% to £41.5m (2007: £35.9m). "We remain cautiously positive in our outlook," it added.

Oil services group Cape said current trading is in line with management expectations, with strong organic growth in all international markets with activity levels at record highs across the group. " Growth and strong cash generation is enabling us to pay down our debt in line with expectations and fills the board with increased confidence about the future prospects for growth," chief executive Martin May said.

Stagecoach Theatre Arts said more school openings than forecast, combined with continued reduction in overheads, means profits before tax for the year to May are expected to be significantly ahead of the current market expectations.

Shares in AIM-listed property services firm First Property rallied after it posted stellar full year results and hiked its dividend. The East and Central European focused firm added that it looks forward to 2009 with continued confidence

Industrial products firm Chapelthorpe said cost reductions and improved trading helped narrow full year pre-tax losses but sees 2009 as challenging.

Shares in Irish Ormonde Mining stepped ahead after it reported 'highly encouraging test results' at its Barruecopardo Tungsten project in Spain.

Construction and legal consultant Driver Group reported a 36% rise in first-half pre-tax profits and said it remains positive about its prospects for the future.

IT group and bid target Netstore played down an article by CRN on its website that suggested buyers wanted to wait for clarity on the firm’s figures. “The company wishes to clarify that the comments contained in that article were attributed to an individual with no knowledge of this matter and should be disregarded,” a statement from the firm read.

FTSE 100 - Risers
Capita Group (CPI) 704.50p +3.00%
Centrica (CNA) 305.00p +2.95%
FirstGroup (FGP) 515.50p +2.49%
Amec (AMEC) 914.00p +2.18%
British Energy Group (BGY) 742.00p +1.78%
BP (BP.) 591.75p +1.50%
British Airways (BAY) 227.75p +1.45%
Imperial Tobacco Group (IMT) 2,023.00p +1.00%
Royal Dutch Shell 'B' (RDSB) 2,059.00p +0.54%
Thomas Cook Group (TCG) 239.00p +0.53%

FTSE 100 - Fallers
HBOS (HBOS) 258.00p -11.64%
Royal Bank of Scotland Group (RBS) 212.25p -9.00%
Alliance & Leicester (AL.) 318.75p -8.41%
Next (NXT) 1,016.00p -7.38%
Kazakhmys (KAZ) 1,550.00p -6.85%
Standard Chartered (STAN) 1,525.00p -6.78%
Whitbread (WTB) 1,171.00p -6.32%
Johnson Matthey (JMAT) 1,858.00p -6.30%
Cable & Wireless (CW.) 155.90p -5.57%
Lloyds TSB Group (LLOY) 332.75p -5.33%

FTSE 250 - Risers
Soco International (SIA) 1,991.00p +3.48%
Rotork (ROR) 1,162.00p +3.20%
Euromoney Institutional Investor (ERM) 356.75p +2.44%
BBA Aviation (BBA) 135.00p +2.27%
Helical Bar (HLCL) 309.75p +2.23%
PV Crystalox Solar (PVCS) 183.50p +1.94%
Real Estate Opportunities (REO) 86.50p +1.76%
Morgan Crucible (MGCR) 200.00p +1.65%
De La Rue (DLAR) 963.50p +1.58%
Spirent Communications (SPT) 68.50p +1.48%

FTSE 250 - Fallers
Barratt Developments (BDEV) 72.50p -20.77%
Taylor Wimpey (TW.) 52.50p -19.23%
Redrow (RDW) 134.25p -18.88%
Johnston Press (JPR) 50.00p -16.67%
DSG International (DSGI) 49.25p -14.72%
Bellway (BWY) 448.50p -11.45%
Sports Direct International (SPD) 81.00p -10.25%
Kesa Electricals (KESA) 170.50p -10.14%
Aberdeen Asset Management (ADN) 118.00p -9.23%
Inchcape (INCH) 349.00p -8.64%

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